Virginia Code 13.1-747: Grounds for judicial dissolution.
A. The circuit court in any city or county described in subsection C may dissolve a corporation:
Terms Used In Virginia Code 13.1-747
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- City: means an independent incorporated community which became a city as provided by law before noon on July 1, 1971, or which has within defined boundaries a population of 5,000 or more and which has become a city as provided by law. See Virginia Code 1-208
- Commission: means the State Corporation Commission of Virginia. See Virginia Code 13.1-603
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Foreign corporation: means a corporation authorized by law to issue shares, organized under laws other than the laws of the Commonwealth. See Virginia Code 13.1-603
- in writing: include any representation of words, letters, symbols, numbers, or figures, whether (i) printed or inscribed on a tangible medium or (ii) stored in an electronic or other medium and retrievable in a perceivable form and whether an electronic signature authorized by Virginia Code 1-257
- Includes: means includes, but not limited to. See Virginia Code 1-218
- Interest: means either or both of the following rights under the organic law governing an unincorporated entity:
1. See Virginia Code 13.1-603
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Person: includes an individual and an entity. See Virginia Code 13.1-603
- Principal office: means the office, in or out of the Commonwealth, where the principal executive offices of a domestic or foreign corporation are located, or, if there are no such offices, the office, in or out of the Commonwealth, so designated by the board of directors. See Virginia Code 13.1-603
- Proceeding: includes civil suit and criminal, administrative, and investigatory action. See Virginia Code 13.1-603
- Public corporation: means a corporation that has shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association. See Virginia Code 13.1-603
- Shareholder: means a record shareholder. See Virginia Code 13.1-603
- Shares: means the units into which the proprietary interests in a corporation are divided. See Virginia Code 13.1-603
- Venue: The geographical location in which a case is tried.
- Voting power: means the current power to vote in the election of directors. See Virginia Code 13.1-603
1. In a proceeding by a shareholder of a corporation that is not a public corporation if it is established that:
a. The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered, or the business and affairs of the corporation can no longer be conducted to the advantage of the shareholders generally, because of the deadlock;
b. The directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent;
c. The shareholders are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired; or
d. The corporate assets are being misapplied or wasted;
2. In a proceeding by a creditor if it is established that:
a. The creditor’s claim has been reduced to judgment, the execution on the judgment returned unsatisfied, and the corporation is insolvent; or
b. The corporation has admitted in writing that the creditor’s claim is due and owing and the corporation is insolvent;
3. In a proceeding by the corporation to have its voluntary dissolution continued under court supervision;
4. In a proceeding by a shareholder if the corporation has abandoned its business and has failed within a reasonable time to liquidate and distribute its assets and terminate its corporate existence;
5. Upon application by the board of directors when it is established that circumstances make it impossible to obtain a representative vote by shareholders on the question of dissolution and that the continuation of the business of the corporation is not in the interest of the shareholders but it is in their interest that the assets and business be liquidated; or
6. When the Commission has instituted a proceeding for the involuntary termination of corporate existence and entered an order finding that the corporate existence of the corporation should be terminated but that liquidation of its business and affairs should precede the entry of an order of termination of corporate existence.
B. The circuit court in the city or county named in subsection C shall have full power to liquidate the assets and business of the corporation at any time after the termination of corporate existence, pursuant to the provisions of this article upon the application of any person, for good cause, with regard to any assets or business that may remain. The jurisdiction conferred by this clause may also be exercised by any such court in any city or county where any property may be situated whether of a domestic or a foreign corporation that ceased to exist.
C. Venue for a proceeding brought under this section lies in the city or county where the corporation’s principal office is or was located, or, if none in the Commonwealth, where its registered office is or was last located.
D. It is not necessary to make directors or shareholders parties to a proceeding to be brought under this section unless relief is sought against them individually.
E. A court in a proceeding brought to dissolve a corporation may issue injunctions, appoint a receiver or custodian pendente lite with such powers and duties as the court may direct, take other action required to preserve the corporate assets wherever located, and carry on the business of the corporation until a full hearing can be held.
F. Within 15 days of the commencement of a proceeding to dissolve a corporation under subdivision A 1, the corporation shall deliver to all shareholders, other than the petitioner, a notice stating that the corporation and the shareholders are entitled to avoid the dissolution of the corporation by electing to purchase the petitioner’s shares under § 13.1-749.1 and accompanied by a copy of that section.
Code 1950, § 13.1-94; 1956, c. 428; 1959, Ex. Sess., c. 57; 1968, c. 112; 1985, c. 522; 2005, c. 765; 2007, c. 165; 2019, c. 734.